One of the most recent advances in car insurance, ‘pay as you’ go policies can have many advantages for drivers; pay as you go can also be understood as telematics or ‘black box insurance’, whereby a device is fitted to your car to record your driving habits. This device can lower your premiums over time by showing exactly how much you drive, when you drive, and what kind of driving style you have; information can then be sent over to car insurers to help them work out your premium.
Pay as you go insurance is particularly ideal for young drivers, and for any drivers that have had problems getting a reasonable quote because of insurers being wary about certain age categories. Young males aged 18-21 can be particularly hard hit by these generalisations, and can be rewarded by pay as you go insurance if they can prove that they’re responsible drivers, or that they only drive a limited number of miles every week.
Telematics insurance works by recording your driving, as well as your general driving habits, which you can then focus on to reduce speeding and other errors that can lead to accidents and claims. Recording the number of miles you drive per day and per week can show that you’re not driving at high risk times, or on roads where there is a large volume of traffic and hazards. The more information that can be provided to insurers, the lower your premium could potentially be.
So, if you are a safe driver, or if you have a routine where you know how many miles you’re likely to drive in the week, you can make a stronger case for a lower premium. Individual control is one of the main benefits of pay as you go insurance, as you can opt to adjust your driving by either reducing your hours in the week, or by choosing to drive in off peak hours of the day; different insurance companies can specify when these off peak hours take place.
There are a few disadvantages to pay as you go insurance that should be considered. Primarily, this kind of insurance can create extra pressure on you as a driver to reduce your time on the road, while making you more self aware of your driving. You may also find that restrictions on driving at peak times, or sudden changes to your routine like moving to a new area, or starting a new job, can drive up the cost of your premiums.
Still, pay as you go insurance can be a better option for many drivers than generalised policies taken out on the basis of the performance of a whole age group. Pay as you go insurance can be much more comprehensive in terms of the information provided, while also offering a lower risk for theft through the presence of a GPS tracker within the black box device used. It’s worth, then, checking with your insurance company to see what kinds of offers are available for pay as you go policies.